Mortgage advice & Valuation of Real Property
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Retail Banking and Wealth Management — JAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary purpose of mortgage advice in retail banking?
Mortgage advice helps customers select suitable home loan products aligned with their financial situation, repayment capacity, and long-term goals, ensuring informed borrowing decisions.
What is a 'registered mortgage' and how does it differ from an equitable mortgage?
Registered mortgage requires registration under Registration Act; equitable does not.
Which RBI guideline governs fair practice in mortgage lending by banks?
RBI's Fair Practices Code for Lenders mandates transparency in loan terms, interest rates, charges, and grievance redressal for all mortgage lending activities by banks and NBFCs.
What is the maximum LTV ratio prescribed by RBI for housing loans up to Rs. 30 lakh?
RBI prescribes maximum LTV of 90% for housing loans up to Rs. 30 lakh.
What is the Loan-to-Value (LTV) ratio in mortgage lending?
LTV ratio is the proportion of the loan amount to the appraised value of the property; RBI caps LTV at 75-90% for housing loans depending on loan size to manage credit risk.
What is the 'Debt Service Coverage Ratio (DSCR)' used for in mortgage underwriting?
DSCR measures borrower's income adequacy to service mortgage EMIs comfortably.
What does 'market value' of a property mean in the context of valuation?
Market value is the estimated amount for which a property would transact on the date of valuation between a willing buyer and seller in an arm's length transaction after proper marketing.
Which Act governs the registration of mortgages and property documents in India?
The Registration Act, 1908 governs registration of mortgages and property documents.
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